No Change

The underlying picture still looks the same. Stocks have rallied back up but there are so many persistent divergences that aren’t supportive. Here breadth, strength and bullish percent all look like the last gasps in 2011.

The Nasdaq has outperformed the other indices to make new highs with the rally back up, but breadth is flagging a clear warning.

Really, there are so many divergent indicators on US stocks it’s take your pick.

Meanwhile, gold dropped again but the picture is the reverse, with sentiment and positioning at contrarian levels suggestive of a bottom.

Source: Sentimentrader / King World

Therefore, not much expansion needed. We are through the new moon and moving beyond the seasonal geomagnetic peak, and all the indicators are calling time (namely, major reversals in both classes). So just watching for the turn again to resume the attack and that should be the final move.

356 thoughts on “No Change”

Some astounding moves this week, but none more so than GOOGL. A $67.5 billion single day jump in market equaling the total combined market cap of 415 SP500 companies is incomprehensible to me.

The move in NFLX, with talking head Cramer saying that it is grossly undervalued despite the P/E and having to transform future valuations into earnings in whatwill become an increasingly competitve and crowded space.

Interventionism will eventually wreak havoc in Bond/debt,Stock and Real Estate markets globally.

I found Paolo’s gold chart very interesting Allan, thanks for sharing. Are matters going to become unhinged so quickly that gold shoots above $2,000 by the end of the year? Or will the ECB launch GOMO I wonder?

I guess that price level might put to bed any of the manipulation theories eh! 😉

I was also interested to see that his cycles show silver doing very little, which fits with my expectations. I might spend $10 for his longer term cycle charts. I will contact him to find out some background info first.

GM, if you go right back and study his DOW model you will notice that it was working nearly perfectly up until around late 2013 and then………?
The DOW model began diverging, hich even threw Paolo, he has no real explanation fir why the DOW model, which orked for so many years suddenly began to diverge except for possibly being due to CB QE policy which altered the whole macro picture. His XOI model has worked extremely.

My feeling about the Gold model is that just as the DOW model began to diverge, just like the DOW model did earlier, that perhaps CB intervention IS having a much greater impact on cycles than many ever thought possible?

The question that remains is how long can they exert their influence upon the cycle and will their intervention cause a much more dramatic reversal hen it comes?

I happen to believe that will be the case. I have mentioned here before about a quote made by a previous Australian Prime Minister in the early 90’s, at the time he made the quote, he was castigated and riddiculed. Most misunderstood what he really meant by it. In my opinion he was a very intelligent and progressive thinker, that had a great understanding of business cycles etc and what th longer term consequences would be to artificially distort economic fundamentals.

Cycles are cycles though Allan, they either work or not.
This bubble is huge, maybe it is throwing out all cycles.
It’s a human bubble though, central banks merely facilitating the conditions for a bubble, humans cause it.

Thanks. The end is near. Check out what happened on Friday. The VVIX/VIX ratio exploded to an extreme which since the end of QE has indicated a near term top is at had. We should see a top immediately or within days.

John, excellent analysis as always. I admire your patience and you seem very calm. Very hard to do in this environment with everybody excited about the PTB “fixing” Greece and China. I think there is a growing element that also cheers the Central Bankers ability to destroy gold. I just sit and smile and shake my head.

I am speechless. There is a good chance this is the peak, but my goal is to capture the -50% downside and that means staying alive until the drop begins. With IBB at new all time highs, I don’t think I can live with unlimited rally potential without a logical place for stops.

NASDAQ was on fire last week, it must be one of the best 5-7 days rally in many years, but based on what i saw the rally was led by GOOG/GOOGL NFLX AMZN FB EBAY and a few others, actually GOOG/GOOGL was responsible for 70-80% of the rally on friday.

next week AAPL & AMZN report, AAPL is expected to beat expectations, so QQQ will soar even higher, due to AAPL weighting. AAPL is alo in DJIA & SPX,
based on what i’ve heard & read GOOGL & FB are both expected to motor higher
so unless there is some horrible news, i’d say indexes have a good chance of being higher.

could NDX/COMP be starting the parabola phase? i’m short and quite concerned.
appreciate feedback

No, no parabolic phase, but you are early with shorts. There will be more upside until mid September at least.
The best way to play it – impulse is finishing and a pullback should follow. Get rid of shorts when it moves lower and enter a long to ride a few weeks to get back your money:) and enter shorts Septmber-October when the pattern is finished.

This is the problem with bears – no patience to wait until the pattern is finished…
and some like Nicolas look like genius….. in fact he is clueless

I am sure -5.5% will not stick — maybe it will be -1% or +1% even who knows. But -5.5% is what is reported on ft.com as the worst print….At this point, I don’t care if it is -10%. Maybe I should just hope it is -50% and then I can really load up the truck.

It will be very interesting on how the gold stocks react tomorrow. I have been looking for a 120 HUI for the last year. With the possibility of a stiff market correction, the HUI may fall below the 108 – 112 level.

It is clearly a manufactured stop run in gold by the big boys this PM. They are trying to get as the weak handed retailers to freak out and sell as much as possible. Hopefully gold will continue staying this low until the US market open. I am loading up my truck as I see this as an opportunity of a lifetime.

The drop convinces me that the bounce later this month could quickly get gold back to as high as 1200 level, before an epic 8 year low drop in late in the year. Depending on how quickly gold bounces, the sell-off in the fall could potentially drop gold below $1000 imho.

There will be one more lower low, I am watching 1065.
It looks like wave 3 on silver and gold, perfect measurements and usually the panic low is not the low.
2008 was a bull market, which means corrections end suddenly, now we are in a bear market and I expect the low to be tested(lower low with divergence)

A bear market in your opinion. In my opinion we’re still in a secular bull market and a similar situation to the 50% correction in the 70’s when gold dropped from $200 to $100 only to top out at $850 in Jan 1980

Miners in a bear market since 2008 gold since 2011… and this is not even the low just important bottom….
Just admit it – the most severe bear market for gold miners and gold/silver severe bear markets.
Who cares about useless definitions secular or not when they are down for 5 years and more and loses 50%(gold)/70%(silver)/80%(miners)
If you trade 15 years in the future great for you…..

It is a bear market and it has one more year to go… just accept it and let go.
I will load with both hands too, but when the moment has come.
The same like stock bears…. why just do not wait until the patterns are finished… sorry but trading bias is bullshit.

May be arrogant, but at least not delusional and afraid to call it as it is.
It is the most severe miners bear market and this will not change because you are afraid to say the words “bear market” and some “who cares” stock in Australia.

GM large Commercials are reversing their shorts as we post. Wash rinse repeat.

It is as I have sad all along. Paper markets dwarf physical markets. Why in do people think many miners are underwater. It is why I only invest in miners that I know can endure the hardship amd see it through.

There are bargains out there and many bottomed late 2014. You just have to know where to look.

Hi all ! I repeat: please get out of all gold miners, especially ABX which has a good chance of going bankrupt. I remind you that ABX has 13 billion in debt with a market cap of 9B. This is unsustainable.
Otherwise, keep adding to your AAPL, IBB, QQQ etc…
I was thinking about adding NFLX to my portfolio. I would begin with a small position.

purvez, I don’t think Nic read Jeff Snyder’s post you linked, these comments will be above Nic’s head of course:

‘As for Netflix, with its 300 forward P/E, the only metric I could find in the report that was also triple digits was their cash flow. Unfortunately, it is negative and grew more so by a factor of 3. Yeah, yeah, I know. I’m old and don’t get it, yada, yada, yada, it’s different this time, yada, yada, yada.’

well, you shouldn’t laugh. I’m sure there are people listening to John and a few posters here. And they are losing a lot of real money.
I cannot be more clear: stop listening to the bears and avoid gold stocks here.
best regards

No, gold stocks will rally for 2-3 months, extremes are followed by mean reversion….always.
For years… hmmmm the miners are correcting for 7 years since 2008 and stocks are up for 7 years.
Stocks will go up and miners lower for years to come… good luck with that.

I agree with you on that. There is chance that what we just witnessed important bottom in gold. Initially I thought it would find bottom at 1130 and form the triangle to 1250 or so but now I am more inclined to C-wave scenario which means even 1450 in just 2-3 months. USD should correct, for now there is not enough momentum in USD to support ongoing rally. Clearly, sentiment in gold is awful enough to support major rally. However If gold breaks under 1070-1080 and USD index travels north of 100 then it means gold crash now.

This observation is quite logical. It is now apparently obvious that stocks and gold miners are mapping out inverse extremes, just like during the 1998-2000 period.

If the analogy mirrors the last cycle then gold miners should stop dropping to lower lows by Q4-2015 and then probably trade sideways in the early beginning of a “stealth bull market” during 2016, similar to 1999.

When stocks peak after the bubble forms in a 2017 climax, then you will see big money flow out of stocks and back into gold miners again to push them up to higher levels.

I’m almost speechless by the carnage in the mining stocks. I really made a mistake when I bought RIO a few weeks ago. Fortunately, I sold at a small loss.
I honestly never thought GDX and GDXJ would go this low, but with the threat of bankrupcies I am confident they will go lower. As I said, ABX and to a lesser extent NEM have huge debts and will go under if gold stays at these prices. This is a fact.

Nicolas if I had listened to the likes of you and Martin Armstrong and all the other naysayers I wouldn’t have picked up the bargains that I dd in late 2014 that are now well above their lows.
Nothing goes up in a straight line and a correction here after, in one case, a 750% gain since November last year is nothing.

The participants in the comments section are heavily bearish. If you like that and think that that helps your trading and improves your bottom line, then by all means run the bulls off. But if you want a more balanced forum, then let bulls and bears alike share their views without subjecting them to a verbal thrashing.

You should make difference between bullish and bullshit.
I was arguing for example that European stocks will go higher and now the DAX is 1100 points or 10% higher and it has more to go.
But saying buy IBB when it is in wave 5/5/5 from the 2009 low (there is more upside in the next 1-2 months to finish th e pattern) bearish patterns and distribution in the last year (SPX/NYSE gain top is not in) 9 years cycle top and 20%+ correction expected it is not bullish is just bullshit.
I will not start with how many companies have earnings at all and triple digit PEs.

I will say it again Nicolas looks like a genius because the bears on this board do not have the patience to wait until the patterns are finished. In fact he is clueless and anyone who follows his advice at this stage will end holding the bag.(unless you are a swing trader there is more upside in the next 1-2 months)

‘JUST’ to put the cat among the pigeons….(I’m in that mood, SORRY). Karni, who’s to say that Nic is not a better waver than most of us and that as SOON as he sees the 5/5/5 coming to an end he will change tack?

Admittedly he has never mentioned waves as the reason for his calls but surely he must have some secondary ‘evidence’ to go on aside from his CB friends? No?

Gold stock ETF’s have in recent years enabled investor perceptions to become distorted.
Unfortunately it has perpetuated a, “can’t see the trees, for the forest” mentallity and made investors EXTREMELY lazy and inept at investing.

This goes for all ETF’s btw. Good investors now are few and far between.

The animosity is not at Nicolas’ view – most people are both bulls and bears simultaneously. The animosity is directed at his reckless, naive and smug postings. The limited value of buying because CB’s are supporting themarket, and having an exit strategy which involves selling when CB’s announce they are no longer buying equities is astounding….

EWers – have you had a look at the short term waveform of the RUT down from the high? Very promising. Weak as the brown stuff last couple of TDs compared to the big caps also. We were very close to a weekly sell signal yesterday: http://schrts.co/SHnlt7

Ironically, much as happened with the monthly sell signal earlier, this is often the sign to be on alert for a counter move.

Nevertheless, watching the short-term action here with a view to initiating a short position.

The intermediate term pattern looks ugly, I have no idea what it is from the October low…. Best guess in the middle of iii/5 ED. Some one? ideas?
Short term from the low I see impulse… SPX,DAX still not finished to the upside but correction expected I think this should be just “a” from a-b-c….
Personally I would not hurry with shorts.

The beauty of EW – it’s all up for discussion, all the time. Not my primary (or even secondary) trading tool; I do however take note when I see a perfect 5 down, 3 up, especially from a significant high, where there is other strong corroboration.

I will be very interested to see the COT for gold next week. I would suggest with this weeks flushout that Commercials will be net long come Friday.

I still believe that the potential was that Monday’s asian low was a very significant bottom.

Many Aussie and Canadian gold stocks bottomed late last year.and are diveging with lower lows in the USD gold price. I have always expected that gold stocks would put in their major bottoms well ahead of gold.

Finally, ETF’s now distort moves to a greater degree. ETF’s have swollen in size in the last few years. Comparing moves now to even hlalf a decade ago is very difficult. The majority of investors now have a huge lack of ability to syphon through stocks in a sector to find potential outperformers.

The reasons for this huge bull market are also the reasons why it is going to end in catastrophy. An inability of investors to quantify and correctly price risk and the huge explosion in ETF’s.

Patience, this is only week 2 from the new 40 weeks cycle.
SPX the price is above MA50 on the hourly chart and I expect a touch and move higher… nothing interesting for the week.
The price likes to “dance” with MA50:)

The DJIA is down about 200 points but the S&P is down only 12. I would have expected the latter to be down about 20. Anyone got any technical comment on whether I should be reading anything into this discrepancy? Thx in advance.

Armstrong seems to be convinced that there is downside movement for gold down to 600-700. That the bond markets will be in trouble in Oct and this will drive capital flows into stocks and equities causing an eventual blowoff top in stocks. What do you guys think about this? http://www.armstrongeconomics.com/archives/35149

Biego, I view silver and platinum and palladium as industrial metals, tied to the economic cycle.

I don’t think the prices of any of those three will shine for many years, whilst gold moves up by thousands of percent. Many retail metal bugs are holding silver, but no one else wants the stuff. I only own gold.

Yes John Li, something doesn’t add up. I want to be short but who in their right minds would do that before Apple’s announcement? However I suspect this market is ‘telling’ us something. Not sure I understand the language though.

Can’t speak for others, but I capitulated on GDX at $17, and I am not being drawn in. I am sure at some point it will rally from $14 to $17, and I will miss that rally, but then I will be getting back in where I left off.

I disagree massively. The drop yesterday was due to the strengthening euro. I’m still expecting euro dollar parity and a massive rise in the DAX as a result. I did manage to get short the Dow though and made back most of my earlier DOW losses. Thank you IBM! Looking to add to DAX longs over the coming weeks if there is continued weakness.

Well, that’s the first ‘gap up’ filled on the way back down.
You may be right krish if the euro collapses some more (BIG if though), but in the short term, there would appear to be good money to be made on the short side as those gaps are filled.

This might be the top, but not yet the waterfall. Here are my counterpoints.

1) margin debt to gdp is at the high. (And let’s say it doesn’t go higher) Like 11/1972 or 11/1980 or 3/2000. These markets continue to frustrate put buyers for 6-12 months before the waterfall which is closer to 1974, 1981 and 2001. In other cases, margin debt peaked before the market, like in 1987, granted 1990 was in Japan.
2) this is year 3 of the presidential cycle, which has supported stocks. Not a stretch to think we have peaked but can whipsaw for the next 5 months, then dive in Y4.
3) At SPX -20%, like 1/2008, the fed will say or do something. We didn’t hit there, and so I think it is hard to call this rally a second chance.

Conservative bears will win. History will still see 2015 as the peak. But splitting hairs over your “on the attack” strategy. I am thinking up and down frustration like in early 1973, 1981 or 3-9/2000.

China is a different story. I assume it is so levered that waterfall and margin peak can happen at the same time.

I’m expecting the dollar to continue to strengthen (safe haven perceptions and money flows, but also *dollar* shortages globally). At some point, gold will be rising in all currencies, including the dollar. Quite soon I think. Industrial commodities will tumble further, as global trade contracts.

That said, continuing to watch the erosion in the HY market, and even though a bit disappointed we haven’t seen more of a sell-off in the general SM today, feel good about where we are HY-wise….
Still 100% short in my SM trading system, and very short the SM myself….

Been a trying couple of weeks, these past days, but as I said, watching HY continue moving lower is indicating where the SM is going, I believe….

The decision to long/short US equities is based upon several factors, combined with looking at the chart. Say if all of factors negative (like now) but price has already sold off, better to remain in cash and not short. Or conversely if all factors positive but price has already ramped up, better to remain in cash and not go long. I am personally short at moment and will remain so until stopped out until at least Friday morning. Beyond that mixed bag, not a clearly bearish as right now.

Yep, certainly if you look at Cushing and the lack of supply fall-off I wouldn’t be too surprised, however I am talking about oil *equities* – who are collectively almost 45% down from high last summer in a lot of cases. Also for a longer term holding. Might start to build a position soon.

If my long-term predictions are correct, oil will be low (priced in Euros) for many decades, but there’s a good few years before that arrives. I wonder if oil equities could lose another 30-50% in the next couple of years though, as recession bites.

Hi Purvez and all ! I reiterate that you should avoid the weak sectors like gold and gold stocks, and focus on the strong one like IBB and QQQ (which are near the highs again).
Excellent earnings by AAPL yesterday, i don’t know why the stock was down, i have no idea but it should last too long. I hope you’ve loaded up on AAPL yesterday.

Hi ! I’m ready for AMZN earnings, the stock should jump after hours. I didn’t understand the market reaction after earnings which were excellent. It didn’t seem rational to me, so I viewed it as a buying opportunity.
I see that GDX and GDXJ are making new lows today, as expected. There’s still a long way to go in this bear market.
regards

we won’t know who’s the bag holder until we see AAPL’s price 6 months from now, or a year from now, will we. Below 100, yeah the bag holders will have been fleeced. But what will you say if AAPL is trading at 160 or 200?

OK, AMZN totally exploding after hours, as predicted again. People on this board were mocking me when I decided to buy at 448$.
I don’t want to brag but it’s honestly so easy to make money in this market.

John Li. As regard to GDX, my 2 cents is that $13.50 is a support I want to see in order to view today as a completion of wave v of 3. (I’ve been averaging down, buying since $14 ish). The intermediate bottom is very very close imho.

If the rally lasts about 5-7 weeks, then that would be a solid confirmation that this count is correct.

Armstrong makes me laugh. He always publishes the fan mail, but I emailed him recently pointing out some of his contradictory views, and that I haven’t lost my shirt, house or dog being in unleveraged physical gold, as I can just sit (and buy) through the dip. He won’t publish any of my email, even though I dared him to.

He’s anti government an anti-socialism, but moans that savers will lose their *money* (as in Cyprus) when banks fail, and claims that as robbery. Well, Marty, you can’t have it both ways old chap. If banks fail, their creditors must suffer the losses, or those losses will be socialised.

GM, mate I gave up on MA ages ago.. Yes his ECM has merit, but as you point out he covers up his mistakes. And there are PLENTY!

I have also emailed him to ask questions about his past grossly incorrect predictions, like back in 2011 on gold going parabolic to 5k, interest rates rising from 2012 onwards, to name but two…..no reply 😉

Funny how he now castigates gold but back in 2011 he was talking 5k gold. How many investors did he push into gold on that talk?…..only to do a 180 degree about face???

Yes Phil stunning but not as bad many think depending on where you look at it from.
Most of my ASX Aussie stocks have weathered the fall very well, especially given that many have been up very strongly since last year.
Will add very soon.

What is most interesting is the premuims on physical in Oz atm and I ssume elsewhere.

That is what is so distorted about this whole Au/Ag market. Try and buy physical in any quantity anywhere near spot.

Hi GM, I don’t know how to interpret MA’s computer forecasting array. However, he’s been on the record saying gold dropping below $1000 during the fall or early 2016 which I tend to agree with. The sell-off in gold so far is playing out the scenario that MA computer had predicted in June. Perhaps the 2nd square refers to the gold bottom around $950 in early 2016?

On another note, gold undercut low action tonight makes it fall very close to the 3 year support level of 1030, where I expect heavy buying by institutions may rally gold backup overnight. The sentiment is super bearish right now, hence the bounce is imminent in order to reset sentiment, and prepare the market for the epic fall of stocks and commodities later in the year. This no doubt will present us with an once in a lifetime opportunity imho.

That is why COMEX trading in PM’s should be abandoned. Futures were originally setup to hedge risk not to allow abuse. They no longer serve the purpose and have become nothing near to what they are meant to do.
It is a scam and yet allowed to carry on unabated, in fact quite the opposite, assisted by a totally corrupt establishment.

Banksters have ruled for so long it can only change if they are successful in destroying each other. But first the people along with their economies and the last standing will undoubtedly be a giant whale leech bankster.

My hope is that gold continues to drop to 1030 … get it over with, then bounce violently back to 1300 within a few weeks. If gold bounces now, all we get might be just dead cat bounce to 1140, then continues sell off to 1030. imv.

The worst commodities slump in 13 years is wreaking havoc for investors seeking to profit from companies in distress. Distressed bonds have lost 8.2 percent this month as oil and coal prices slid, bringing this year’s loss to 12.2 percent, according to a Bank of America Merrill Lynch index that tracks the debt. The securities are on pace to lose more than 20 percent for the second straight year, the worst performance since 2008.

Just a FWIW comment. Someone pointed out to me years ago (on the way up to the August, 2011 highs) that the entire extended move in gold during that time began with a gap at 1073. In these markets that probably doesn’t mean very much but an interesting trivia observation that according to Elliot this would be an area of support.

I’d be interested to see valley’s lunar chord predictions for next week.
As I type (14.25BST), just ahead of the US open, I see those ‘heavy’ candles in many markets: Dax, silver, copper, and gilts and USTs are being bid well.

No ‘news’ driving any of this (no Greek or China nonsense), so it looks as though the buyers of risk are getting out of dodge fast. Could be a worrying weekend.

Oh look, as they’re speeding out of dodge city, they’re waving out of their car windows? I can see someone in the distance waving back, he wants them to stop….I think it’s our Nic, left behind by his casino friends. Bummer.

China’s manufacturing activities are at 15-month-low. Markit’s flash manufacturing PMI fell to 48.2 in July, down from 49.4 in June and weaker than 49.7 expected by the street. A reading below 50 signals contraction.

A great quote from Bob Hoye for those who think CB rate decisions matter at all:

‘The other distraction has been about when the Fed will raise rates. The event and all of the discussions about it just doesn’t matter. In the culmination of financial manias, the senior central bank has been months behind the changes in market rates of interest. That includes 2007, 1929 and 1873. Also when credit markets become fully stretched, they have had no influence upon the action in spreads or the curve.’

Hey, i’m still waiting for the congratulations for my AMZN trade, and my predictions on gold and gold stocks.
Everything’s going smoothly. We might have a respite soon on gold, but the bear is just beginning.
regards.

Stocks down and gold down. Maybe they are positively correlated now! My dow long was stopped but started buying the dax again today. I believe I will hugely rewarded by year end. Just a repeat bear trap like the greek situation.

I am and longer term the picture is still bullish.Today is just one of those intra-day swings. A lot of money has been taken off the market lately and there will be a wave of buying as investors look for the value in europe. I am not worried.

well as I said many times before, please use guaranteed stop losses. It feels like one of those change of sentiment times where we are potentially in no man’s land. SPX puts looking good so far though.

Hi Gary ! I’m still bullish, although there are some signs of stress. High yield is really dreadful, terrible performance lately. Oil is also problematic here, if there’s another leg down in the oil price, oil stocks will crumble.
So, i would still be long IBB, AAPL, QQQ etc… and short oil and gold as a hedge.
(although the gold sector could have a small dead cat bounce soon)

Hi Nicholas.. wow the move in IBB last week & especially on Friday was incredible, it has retraced 618% of the move up since july-8th (which was one crazy run-up.
BIIB got hammered last week,down 22% on Friday and down $112 since Tuesday and has erased ALL GAINS since nov-2014. REGN CELG & GILD all got hit badly.

i was shorting IBB for last few weeks and decided to cover on friday, as my gut feel is that TPTB won’t let IBB fall just yet. so i decided to buy the dip.

NOTE: there was a huge BUYING ON WEAKNESS friday 1.08 billion and 491 million on Thursday and 126 million on wed – usually after such a large print the market rally’s the next day.

my indicators show that the big boys have been buying, and they’ll want to make profits on those stocks,

i read several blogs, and it seems to me, that indicators or timing cycles just aren’t working lately, just about everyone i follow was wrong last week on ALL days. and then NEWS well IMO no indicators work based on NEWS. and we had lots of news the last few weeks, including friday LEAKED FED SPEAK.

The U.S. has looked weak all day long so will need to see how next week goes. Investors are most likely booking profits rather than anything else. Was just reading some articles and saw citigroups prediction of 7700 this year for the ftse. Funny how badly wrong these are sometimes!

My interim targets are initially to be without loss and further to follow the chart until it weighs in against the trade. Counting this down move as commence of a 5 leg C that could stand alone or become the A of a larger pattern. From the ATH this is either P4 or what John has been expecting. I see the P4 take falling by the wayside below SPX 1820 but the P4 take only needs a new ATH to evaporate.

the tools I use are old school ,simple and repetitive
the key to their use in trading the indexes and index etf’s
is the knowledge that the computers that run the markets
rotate the BEST SIGNAL through the the indexes… at the June high
I showed the SPX triggering a test and retest sell
at the early July low I showed the QQQ trade to target line then trigger
test and retest buy
at the recent high it was the TNA’s turn
price traded to target line the triggered test and retest sell.http://stockcharts.com/h-sc/ui?s=TNA&p=60&yr=0&mn=3&dy=0&id=p51017820247&a=331801219&r=1437869675237&cmd=print

Puetz has said the negative phase of the crash Cycle starts Aug 14. The preponderance of crashes (2nd chance top) start on the lunar eclipse, Sep 28th. However, the lunar eclipse marked the low in 1929. Another thing to look for is a 6 week topping pattern. Out of 15 crashes, 8 had 6 week topping pattern, 3 had 10 weeks and 3 were 0.
Notwithstanding all that, the market has two Elliot Wave 1-2’s which would mean we are on a 3 of 3 down. The sharp sell off fits that scenario. However, this is the fifth sharp sell off in the last year.

Shaighai Comp in freefall again dropping out of the bearish wedge formed the last two weeks.
Just shows that once it starts it’s impossible to stop even if you ban selling. Martin Armstrong btw said two weeks ago that China was NOT having a US 1929 style collapse…….we’ll see if he got this totally wrong too.

Good retrace from the recent move up in the dax. Have started layering in long positions here as there will be good buying support coming in. As I’ve mentioned before the DAX is very undervalued and it’s only a matter of time before it hits 12k again.

Krish, if you have a look at a multi-year chart of the Dax, it’s blindingly obvious that the past year or so has been a parabolic blow-off, with the first serious support at 10k. I’m not trying to score points, I just hope you are very careful here.http://screencast.com/t/dSSp6IJ0B7F

I’ve closed my longs on the break of 11100. Will re-enter on a more positive candle. Its starting to look oversold now so expecting a rebound even if it does eventually go lower. Maybe the stock market may fall to pieces about 1 year earlier than I expect so yes I am being cautious. The euro strength isn’t helping either. Great day for the bears though…I clearly got my call for 12,000 soon wrong!

Oil USA. The huge dollar outflows to the rest of the world due to trade deficits, primarily oil imports, greased world trade for decades. Those dollars are not nearly so plentiful as in the past, due to the US oil and natural gas boom. Unfortunately, the rest of the world borrowed $ heavily assuming the $ would stay weak forever, the proverbial sure thing. There will be a continual scramble for $ to service debts. It looks like a self perpetuating cycle has taken hold. Sell commodities to service debt. Commodity prices therefore go down, forcing prices to drop even further and so on. Of course, buying $ to pay debt service pushes it higher and so on. I call it the spread eagle, both sides going against you.

Triffin dilemma is worth reading and Oil has nothing to do with it…UNLESS you look at Oil consumption per unit of exported goods to USA. Oil imports to China are used to manufacture and power demand from countries importing their junk like deadly dog food or contaminated toys.

On the DJIA from the ATH to the 9th June low is almost exactly equal to the drop from 16th July to today including out of hours. That whole move looks like a zig-zag and may well be the ‘A’ that Peter_ mentioned of a larger ABC for W4.

IF that is the case then we are due one heck of a rebound for B.

Of course it could be the 3rd of a 3rd as well in which case it will just continue heading south. We’ll know soon enough.

From an Elliott Wave perspective, the top of the recent 2 week rally in the SSEC looks like a second chance top. According to the US 18 year real estate cycle, first RE tops (2006), then the stock mkt (2007), and then the depression, 2008-9. Using that template, since Chinese RE peaked in Jun 2014, I expected the stk mkt to top this year and the depression by the end of 2016. So far so good.

It’s instructive to review how the CBI performed in 2008 – there were five separate instances the indicator was greater than 11, and all produced a profit 20 days later. At the same time, as we all know the index was down ~-39% over the course of the entire year so one had to be extremely nimble to benefit.

Great going peggy and thanks for all updates. Can I ask you to always write timeframe with your price target? I am confused what to expect first 1949 or 2132?
OR you meant 1949 around Aug 9 and then 2132 around Sep 19?

ok will do. after a bounce at 2052ish, next price target is 1995 by Aug 9. then another wave up (probably corrective) and another low in October – likely 1949. I will update as the 7442 Spiral rotates. 🙂

There were 2 targets for the Expansion high – 2122 and 2132. 2132 was not reached because Expansion (max Spiral radius) occurred during the weekend. The 7442 Spiral is still expecting higher highs after the low is in.http://www.ustream.tv/channel/7442-analytics

Right now on the 5min DJIA it looks like it’s trying to work out a triangle. So IF that’s correct then we’ll have a brief ‘forceful draft’ down and then a complete reversal. (Top of triangle is around 17490)